(DNA)
Oil and Natural Gas Corporation Ltd (ONGC) is not yet clear about the valuation of Hindustan Petroleum Corporation Ltd (HPCL), the oil marketing company it expects to acquire by around March next year.The country’s largest driller is working independently to arrive at a fair price for the deal.Shashi Shanker, chairman and managing director of ONGC, said that the “advisors are working on what amount needs to be shelled out for the acquisition”.
The deal, which was announced in July this year, has a proposed arrangement of ONGC acquiring 51.11% of government stake in HPCL, which is among the largest oil marketing companies in the country.This will also help the government raise funds by monetising its share in the companies and using the proceeds from the sale in social and other sectors.
The government also aims to reduce the import of oil and gas by 10% in the next five years.Meanwhile, JM Financial is said to have submitted a report to the government, putting the asset valuation of HPCL at around Rs 114,000 crore, which is about 70% higher than its current market capitalisation of Rs 66,000 crore. This would mean a higher outgo for ONGC as it would now have to spend around Rs 55,000 crore instead of Rs 33,000 crore which it had earlier envisaged.
